Australian economy strongly influenced by East Asian market conditions

2 Dec 2011
Market fluctuations in East Asia and their impact on Australia is the focus of the latest edition of the Australian Economic Review (AER), the peak economic policy journal in the country.

The risk profile of the Australian economy is changing, according to Lei Lei Song of the Asian Development Bank and Ms Sui-Lay Tan of the Melbourne Institute. Their study measures the extent to which fluctuations in Australian business conditions are increasingly being influenced by those in East Asia. Both authors argue that Australia needs to engage in more macroeconomic interdependence with its neighbouring economies. Ms Anne Leahy and Paul Jenson from the Melbourne Institute also examine Australian-Asian links using a range of economic and social indicators.

The Asian Forum section of the AER includes three country-specific articles. Professor Ross Garnaut argues that the profound structural changes now taking place in the Chinese economy change the nature of Australian opportunities in China. Professor Sisira Jayasuriya and Ms Laura Panza from LaTrobe University examine recent developments in the Indian economy and look at the opportunities for significant growth in Australian-Indian economic links, including the possible role of a free trade agreement.

Professor Prema-chandra Athukorala from Australian National University and Archanun Kohpaiboon from Thammasat University examine the impact of the Thailand-Australia Free Trade Agreement. They conclude that it has expanded trade, but the impact is heavily concentrated in a few product lines in Australian imports from Thailand.

In other articles, Professor Paul Miller and Ms Derby Voon from Curtin University analyse data from the National Assessment Program - Literacy and Numeracy (NAPLAN) data. They conclude that performance is most highly correlated with where students live, but performance is also better in non-government schools.

Finally, Professor John Quiggin of the University of Queensland (and author of Zombie Economics) looks at what lessons the economics profession should have learned from the Global Financial Crisis. His conclusion is that while there were many lessons, there has been little change in thinking.

The December issue is edited by Professor Ross Williams AM from the Melbourne Institute of Economic and Social Research and features a number of articles from a Forum dealing with Australia’s economic links with Asia.

The December edition is available online at www.wileyonlinelibrary.com/journal/aere